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Posts Tagged ‘Marketing and Consumer Behavior’

Hop on the Bandwagon…. or Don’t!

April 26th, 2018 2 comments

Would you ever jump off a bridge because everyone else is? Have you ever bought a product because “everyone” has it and you feel left out? If so, you have fallen into the trap of the bandwagon effect. This cognitive bias is defined as  people’s tendencies to quickly conform to popular trends or beliefs within their society (Simon, 1954). This cognitive bias is one that is frequently seen within everyday behaviors. Whether it is seen in social media, advertisements, politics, fashion, or any other trends, people are always trying to jump on this metaphorical bandwagon. One question about why people choose to conform, even if it is not in line with their own personal values or opinions, can be partially answered by the bandwagon effect. Conforming to social norms is something that the Millennial generation has continued to do as a result of pressures from prior generations.

Bandwagon Effect Meme

Although the bias was proposed in 1954, nowadays, the constant pressures to always be up to date with the different trends will only continue to grow as social media continues to take over our lives. The recent creation of social media and other forms of communication only help such cognitive biases flourish. The image to the right is a meme that is mocking the bandwagon effect. Nowadays, people’s eating habits are changing purely because things like “not eating gluten” are cool. People are ignoring actual evidence about different product’s true purposes, and hopping on the bandwagon. People’s desires to consume, buy, and use certain products are not always influenced by the product’s usefulness, but rather by what trend setters are doing. For example, extraneous items that are not necessities of life, such as iPhones, are typically bought based on consumer reviews. Think about things you have purchased in the past. Can you think of any good examples of products you bought because it was advertised as, “everyone’s favorite,” or “America’s best?”

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Sure, I can afford it: The cognitive principles behind mental accounting

April 17th, 2017 3 comments

imgflip.com/memegenerator

I could really go for a burger and milkshake right now.  It’s the end of the month; rent has been paid, my student loan contribution is accounted for, and I’ve maxed out my self-imposed monthly restaurant allowance. It looks like I’m out of luck.  But, after some quick mental math, I realize that I spent $10 less than expected on groceries this month.  Score!  It’s burger time. We’ve all done this: designating money for specific purposes, guesstimating how much we’ve spent, and mentally moving money around when convenient.  These behaviors, among others, are what psychologist Richard Thaler (1985) calls “mental accounting.”  Mental accounting is the process of creating mental representations (meaningful mental images) of money based on its form, how it was acquired, and how you intend to use it.  Indeed, there was nothing concrete about my monthly restaurant allowance or grocery budget.  They were simply my personal mental accounts.  In other words, mental accounting helps us organize our spending behaviors.  It’s not just about budgeting, though.  Categorizing money for one purpose or another can help us restrict our purchases, or, like my decision to buy the burger and milkshake demonstrated, justify moving money around our mental accounts.

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One Item, Two Prices: How the Endowment Effect Can Explain Different Valuations of the Same Object

April 17th, 2017 No comments

If you are not aware of the United Airlines disaster/debacle/controversy/blunder (take

Figure 1: United Airlines aircraft

your pick), I would highly recommend familiarizing yourself. However, to save you some time, I will provide you with a short recap of what happened. On April 11, 2017 United Airlines had over booked a flight from Chicago to Louisville and needed to make room for four members of the flight crew. You can probably guess where this is going –  an overbooked flight with four additional seats needed means that four passengers have to change to a later flight (math!). No one wanted to volunteer to give up their seat, so United Airlines bumped four passengers who were already seated from this flight. For whatever reason, one man really did not want to give up his seat that he had already paid for. Thus, United Airlines underwent an “involuntary de-boarding situation” and thought that it would be a good idea to physically remove this man while he was kicking and screaming. Fortunately for us, and unfortunately for United Airlines, this incident was caught by many people on video and then posted to social media. If you’re curious about what United Airlines missed and how they could have potentially avoided the bad PR they incurred after the event, you should continue reading.
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IKEA: Furniture Company or Masterful Manipulators?

April 16th, 2017 2 comments

www.riskology.co

You wake up one day with the urge to build something—let’s say it’s a chair for your kitchen table. You print the instructions from online, go to the hardware store to get supplies, and then you set up shop in the garage, ready to build your masterpiece. It already seems like quite an undertaking, doesn’t it? And that’s before you realize that you will make a cut too short, need more wood, and all of a sudden the project is going to take twice as long as expected. So, as you stand there in the garage amidst your frustration, you might ask yourself…why the heck am I doing this? Well, I have good news for you. Wood-working enthusiast or not, thanks to the IKEA effect, you’re going to love that chair far more than the one you saw last week at Bob’s Discount Furniture.

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Hop on the Bandwagon: Examining the Cognitive Processes Behind Why You Simply MUST Have That

http://www.honeywerehome.com

Walking around Colby College campus on a rainy day, one often sees a  dizzying number of Hunter rain boots and Timberland boots. It seems that everyone is wearing the same style of boots. Why are these boots so popular? Who started wearing them? Why are these boots everywhere? In his book, The Tipping Point, Malcolm Gladwell examines social epidemics, such as fashion trends and smoking, and the moment they take off. It’s an excellent read that strives to explain how seemingly sudden social epidemics start and are sustained. While Gladwell never explicitly uses the term ‘bandwagon effect’, his case studies in the book concerning fashion trends hint at this phenomenon.

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Are you falling victim to the bandwagon effect?

April 5th, 2017 2 comments

Do you ever find yourself wondering what clothing to buy? What TV series or movie to watch? Or even where to eat? These are common dilemmas all of us run into on a daily basis. If you selected the movie or item that had the most stars or likes attributed to it or the majority of people chose it previously, then you may be falling victim to ‘the bandwagon effect’.

The ultimate decision – which one do you choose and why?

Everyday people are making decisions of various levels of importance, however few stop to seriously analyse and understand the underlying cognitive processes involved. Often decisions are influenced by a phenomenon called the ‘bandwagon effect’ whether this occurs consciously or unconsciously. Bandwagon effect is the idea that people align with or follow the opinions, beliefs and/or actions the majority of the population follows. An example of this phenomenon is illustrated in a study conducted by Sundar, Knobloch-Westerwick and Hastall (2007). When people were given a choice between reading an article recommended by a journalist, website or by crowd support, people were more inclined to choose the crowd option. This is despite the journalist being an acknowledged expert in the particular field. 

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Cognitive Processes in Consumer Decision Making About Luxury Products

May 2nd, 2014 1 comment

Have you ever wondered why consumers prefer luxury products? Many luxury products do not offer significantly more features than their standard competitors, yet they command a much higher price in the market. There are a multitude of factors that lead to consumer preference for a luxury brand or product, such as aesthetic appeal or brand status. Researchers in a study titled “Priming Thoughts About Extravagance: Implications for Consumer Decisions About Luxury Products” investigated the underlying cognitive processes that govern our decision-making regarding luxury products. Read more…